NB Power has asked an American firm to build a controversial natural gas-diesel plant at a cost of more than $1 billion because without it, the province risks running out of electricity within three years, says an executive.
Brad Coady, the vice president of business development at NB Power, laid out the possibility of a bleak future to a group of politicians on Friday who represent a province where three-quarters of people still depend on electricity for heat in the bone-chilling winter.
He told the standing committee on public accounts at the legislature that he discovered the problem during an NB Power executive meeting in the fall of 2023, when he learned the public utility had already blown through its budget for connecting new customers only halfway through the fiscal year.
NB Power had already increased that budget from the previous year by 30 per cent.
Coady said he immediately asked his colleagues in the load forecasting team to assess some figures – predictions on gross domestic product and population growth, which had spiked that year as people flooded in from other places.
Population growth
New Brunswick had its biggest surge in population growth in 2023, up nearly 24,000 or 3.1 per cent, a record in recent decades.
“When they ran the numbers through their model, the light bulb went off that we’re very quickly running out of electricity in New Brunswick,” he warned.
Without doing anything, the executive said he realized, “we are going to be short not in the 2030s, like we were originally predicting. It’s going to be in the late 2020s, 2028 to be precise. So it was at that moment that triggered a bunch of activities.”
Keeping the grid running and reliable was a major theme during the committee session Friday, as concerned politicians from all three parties asked questions for more than four hours about the utility’s ballooning, nearly $6-billion debt, and electricity rates that have gone up 24 per cent over the last three years.
NB Power also plans to boost them another 4.75 per cent next year, and possibly another 6.5 per cent in each of the following two years.
The higher costs have fuelled a public backlash.
Terms of deal remain secret
CEO Lori Clark warned them that without big spending, NB Power wouldn’t be able to keep its plants going, making the system unreliable.
Faced with the possibility of an electricity shortage in 2028, Coady said NB Power quickly put a request for proposals together in 2024 for a plant they knew could be built quickly – a gas turbine plant.
Since then, NB Power has forged a deal with the American firm PROENERGY to build it in Tantramar in southeastern New Brunswick, where the greatest population and business growth has been in the province, enough for 400 to 500 megawatts of energy that could be easily turned on whenever there isn’t enough wind to turn turbines or enough sun to reflect off solar panels.
The terms of the deal remain secret, for proprietary reasons, but NB Power wants to sign a 25-year agreement to purchase power from PROENERGY, which would own and run the plant.
Megan Mitton, the Green MLA whose riding includes Tantramar, opposes the plan because she says burning more fossil fuels would increase greenhouse gases in the atmosphere, warming the planet. Tantramar is part of the narrow strip of land between New Brunswick and Nova Scotia called the Chignecto Isthmus and is particularly vulnerable to climate change and flooding.
She asked repeatedly at the meeting how much the plant and power purchase agreement would cost New Brunswick ratepayers.
Coady said he couldn’t disclose those costs for legal reasons but tried to reassure her by stating that the province’s regulator, the New Brunswick Energy and Utilities Board, and the public intervener for the energy sector, had access to the details of the secret agreement.
However, when Mitton pointed out that the same firm was building a much smaller gas plant in Prince Edward Island for about $300 million, she said it was obvious the New Brunswick version would cost more than $1 billion.
Coady agreed.
The Green politician then questioned why NB Power would forge a deal with a firm that had misrepresented its project in its environmental impact assessment. She insisted it had overlooked Tantramar as an important wildlife corridor, including fish in its brooks, and also questioned why the firm had said early on that First Nations had an equity stake in the business.
Those Mi’kmaq First Nations have since said the announcement of their partnership was premature.
“They’ve misrepresented themselves,” Mitton said. “They’ve said New Brunswick First Nations were equity partners, and they’re not. They’re putting out inaccuracies. I’d argue they’re lying.”
Brunswick News asked the firm about Mitton’s accusations, but spokesman Chris Evans said in an email, “PROENERGY will not comment at this time.”
Backup batteries
Instead of a gas plant, Mitton has demanded backup batteries be used, pointing to similar projects in Maine and Vermont, nearby states with a similar climate.
NB Power has rejected the idea, arguing it would be too costly to put batteries in for such a large amount of electricity – the CEO said it would be billions of dollars.
They also say the technology would only guarantee backup power for up to four hours.
Coady said there were times in New Brunswick in the winter when a high-pressure system moved in for up to a week with little wind, and NB Power needed a plant that was more reliable to back up wind energy.
Liberal MLA Natacha Vautour asked why an American firm had been selected, given that U.S. President Donald Trump has imposed punishing tariffs on Canadian products and has mused about turning the country into the 51st state.
The executive replied that when NB Power put out requests for expressions of interest, the political landscape was totally different.
“At that time, we had Joe Biden as the president of the United States and Justin Trudeau as prime minister of Canada. And we had very good relations between the countries,” Coady said. “The last few months, relations really started to sour with tariffs and trade wars and all these different things that NB Power has no direct control over.”
Coady said PROENERGY was selected over Canadian firms that sent in proposals because it was the only firm that could deliver the project on time. And he said the Canadian firms would have used American technology anyway.
Mitton told reporters afterward she couldn’t trust what NB Power was saying.
“They’re saying, ‘we can’t do batteries, but we should burn fracked gas and diesel in Tantramar,’ and I can’t get on board with that. I have concerns about air pollution, water usage, and obviously the climate, but also the cost.
“A 25-year contract with an American company? I’m extremely concerned. Talking about energy security! I’m really worried signing contracts with companies in the States right now.”
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